While initially your property portfolio will need extra attention, the ultimate goal is a passive income where the cashflow is mature enough to support itself.
To fund an investment that continually loses money, where expenses are more than your income, is not sustainable. Eventually all investments should pay their own way, allowing you to further bring more assets into your balance sheet.
Growing your property portfolio is appealing, but ensuring it’s sustainable and can take care of itself is the first step. A few ways that you can raise the cashflow to make your investing more sustainable.
- Refurbish or renovate – you are in competition with other property owners so keep it fresh. If your kitchen and bathroom are 7+ years’ old, it could be time to look at options.
- Check your cost base (annually) – review expenses, especially insurance and interest rates.
- Raise the rent – remember the market decides the price so choose the right time.
- Pay down debt – guaranteed wealth practice.
- Secure and experienced property management service – run your portfolio like a business not a job.
- Long-term rental with regular increases – keep your tenant with small incremental increases.
- Be unique – e.g. solar stands out from the crowd. Put a lot of research into recurring expenses and this could allow you to charge more.
- Furnish – the tenant pool that requires this is small and niche.
- Allow short-term leases – vacancy is a killer.
- Offer by-room rental – looks good on paper not in reality. run your portfolio like a business not a job.
Once your property is running with Other People’s Money (OPM) and Other People’s Time (OPT), you truly have created passive income. Set but don’t forget; review at least annually to check everything is on track.
How’s your investment looking? Request a property health check today